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ECHO Comment: "Fears of Witch-hunt Against Liverpool FC" part 3

catcherintherye said:
Not skint per se, but just very exposed. They've followed an aggressive strategy that requires both aggressive growth from them, and from football. Neither is happening, so they're tight for cash.

Its all very obvious. They maxed the credit card on the signings, and particularly the wages, blowing City and Chelsea out of the water. In lieu of major sales, they're struggling.
Click to expand...

To add another challange - they have too much rubbish, to the best of my knowledge they have 17 non homegrown in their squad at the moment (Max for PL) meaning that if they buy someone the immediately devalue whoever they remove.

If you want detail on their finances and how tight things might be - post on the @swissramble a couple of days ago.
 
number4. said:
To add another challange - they have too much rubbish, to the best of my knowledge they have 17 non homegrown in their squad at the moment (Max for PL) meaning that if they buy someone the immediately devalue whoever they remove.

If you want detail on their finances and how tight things might be - post on the @swissramble a couple of days ago.
Click to expand...

Re the Swiss ramble post, it was good yes, and said a lot of what I have been saying for months. He has them in a very tight spot, and thats not assuming 100m+ lost this summer (which is widely accepted as them) and has only a 15% drop in a sponsorship deal that was worth £70m (or I may have even read 70m more than New Balance, I can't quite work out which).

I'll be quite frank, his numbers are very cautious. Not just Liverpool but the whole of football are going to really do well to avoid a drop of merch of only 15%. Clubs who have seen sudden and recent spikes will be much more liable. I also think, both of the working assumptions of the Nike deal seem wildly optimistic. It's 30m basic, with 20% of sales up to a certain point (I believe up to when the deal is worth 100m). In their heads that gets translated as "100m deal". It's "100m deal maximum". You won't be able to explain the difference to 99% try as you might.

If he's working on it being 70m minus 15% it gives a deal woth 60m. That to me seems very optimistic. I think if they sell the same volumes as last year- CL run, full stadiums, no lockdown, retail booming etc thats a good return for them. It was around 1m units of the shirts and I'm sure some training gear. 60 quid a shirt, round the numbers up and you have about 70m revenue off shirts. Lets be optimistic and assume all sold at full price (they won't be) and training gear is around half that and you have a figure of £100m. To match that figure would mean an overall deal worth £50m p/a (up from about £45m last year).

I see that as very much best case secnario.

As for the wider context, they essentially use transfers creatively to fund a huge wage bill. They have lots of people on long term contracts, expecting values to just keep rising. Now the market slows down, what was a strength is now a weakness. They really can't grasp that process either. What you do in a boom is often the opposite of what needs to happen in a recession. Theres no doubt they were being well run for the boom, but the recession is catching them out.

Some of them think its a big conspiracy, which its not. They've hedged on the market contiuing to grow. It's shrunk. They're left exposed. They're left liable to oaying a huge wage bill without Uniteds cash reserves and long standing appeal, or the shareholder investment of City or Chelsea. You can get into the detail of it, but essentially thats it.

Good luck getting market value for the players too. They thought they'd get 30m for Shaqiri. He just gets loaned out, probably for 50% of his wages being paid to some German team.
 

catcherintherye said:
Re the Swiss ramble post, it was good yes, and said a lot of what I have been saying for months. He has them in a very tight spot, and thats not assuming 100m+ lost this summer (which is widely accepted as them) and has only a 15% drop in a sponsorship deal that was worth £70m (or I may have even read 70m more than New Balance, I can't quite work out which).

I'll be quite frank, his numbers are very cautious. Not just Liverpool but the whole of football are going to really do well to avoid a drop of merch of only 15%. Clubs who have seen sudden and recent spikes will be much more liable. I also think, both of the working assumptions of the Nike deal seem wildly optimistic. It's 30m basic, with 20% of sales up to a certain point (I believe up to when the deal is worth 100m). In their heads that gets translated as "100m deal". It's "100m deal maximum". You won't be able to explain the difference to 99% try as you might.

If he's working on it being 70m minus 15% it gives a deal woth 60m. That to me seems very optimistic. I think if they sell the same volumes as last year- CL run, full stadiums, no lockdown, retail booming etc thats a good return for them. It was around 1m units of the shirts and I'm sure some training gear. 60 quid a shirt, round the numbers up and you have about 70m revenue off shirts. Lets be optimistic and assume all sold at full price (they won't be) and training gear is around half that and you have a figure of £100m. To match that figure would mean an overall deal worth £50m p/a (up from about £45m last year).

I see that as very much best case secnario.

As for the wider context, they essentially use transfers creatively to fund a huge wage bill. They have lots of people on long term contracts, expecting values to just keep rising. Now the market slows down, what was a strength is now a weakness. They really can't grasp that process either. What you do in a boom is often the opposite of what needs to happen in a recession. Theres no doubt they were being well run for the boom, but the recession is catching them out.

Some of them think its a big conspiracy, which its not. They've hedged on the market contiuing to grow. It's shrunk. They're left exposed. They're left liable to oaying a huge wage bill without Uniteds cash reserves and long standing appeal, or the shareholder investment of City or Chelsea. You can get into the detail of it, but essentially thats it.

Good luck getting market value for the players too. They thought they'd get 30m for Shaqiri. He just gets loaned out, probably for 50% of his wages being paid to some German team.
Click to expand...

My take - they have bet on the team they have. Invested in big wages for their big players and relied on the dros going to Bournemouth etc. and are now stuck with the high wage bill and no movement from their extras.

Dont know where they turn now -I'd guess they try to go again once before being forced to sell at least two of the "big gins" next summer to refresh squad. Risky game of poker that
 
number4. said:
My take - they have bet on the team they have. Invested in big wages for their big players and relied on the dros going to Bournemouth etc. and are now stuck with the high wage bill and no movement from their extras.

Dont know where they turn now -I'd guess they try to go again once before being forced to sell at least two of the "big gins" next summer to refresh squad. Risky game of poker that
Click to expand...

Their owners are pretty adept guys, I've always said that as well. Werner is very skilled in building value.

The issue is to some extent a cultural one. There are cultural differences between Europe and America. Sporting regulation is a lot stronger and more firmly adhered too in America. It's not here. Also the general churn and life cycle of teams is more accepted there. They take a very radical approach to team building. The Red Sox sold their top 2-3 players recently to start again. There was frustration, but in Englnd to run a side into the ground to start again will be very unpopular.

I think their view is, in the cycle they are in, they will lose some points and performance. They've gone from 18th or whatever to first. So they can slip back to 7/8th in order to build another team. It is a pretty good strategy, but the variable is obviously the supporters who probably don't want the rebuild.

I also think they have been caught out by this crisis. They gambled heavily in the good times. As you say lots of players on long contracts, with big wages- many of them not home grown. In the boom times, someone will always loan them, so you're fine. If one or 2 do well, then some will be sold on for good money. Happy days. Now though, their wages are so high, and cubs are belt tightening and you are left with a lot of "assets" that are hard to shift. They've gambled and it's now a bit of a liability. Chelsea are very similar, but Chelsea have a shareholder who's both willing and able to invest to keep liquidity going,

One bit that really hit me from the Swiss ramble post, was that all these profits they had are almost entirely down to player sales. You take the ability to sell/loan these players away for inflated fees, and the Coutinho deal and they are breaking even operational. You then throw in a cut to income, as we've seen and they are under real pressure. The worst think you'd want as a football club now, is a £300+ million wage bill, most of which is tied up to 3-5 year contracts.

As for the squad, I think they'd have liked to have freshed it up a bit and moved a couple out. If they don't sell any this summer, the value of their stars is depreciating rapidly as they approach 30. VVd is 30 next summer, so is Firmino & Henderson, Salah, Mane, are 29. You are getting to the point where people just pay nominal fees to pay the wages. I doubt it was ever the plan, but it's where they are at.
 
catcherintherye said:
Their owners are pretty adept guys, I've always said that as well. Werner is very skilled in building value.

The issue is to some extent a cultural one. There are cultural differences between Europe and America. Sporting regulation is a lot stronger and more firmly adhered too in America. It's not here. Also the general churn and life cycle of teams is more accepted there. They take a very radical approach to team building. The Red Sox sold their top 2-3 players recently to start again. There was frustration, but in Englnd to run a side into the ground to start again will be very unpopular.

I think their view is, in the cycle they are in, they will lose some points and performance. They've gone from 18th or whatever to first. So they can slip back to 7/8th in order to build another team. It is a pretty good strategy, but the variable is obviously the supporters who probably don't want the rebuild.

I also think they have been caught out by this crisis. They gambled heavily in the good times. As you say lots of players on long contracts, with big wages- many of them not home grown. In the boom times, someone will always loan them, so you're fine. If one or 2 do well, then some will be sold on for good money. Happy days. Now though, their wages are so high, and cubs are belt tightening and you are left with a lot of "assets" that are hard to shift. They've gambled and it's now a bit of a liability. Chelsea are very similar, but Chelsea have a shareholder who's both willing and able to invest to keep liquidity going,

One bit that really hit me from the Swiss ramble post, was that all these profits they had are almost entirely down to player sales. You take the ability to sell/loan these players away for inflated fees, and the Coutinho deal and they are breaking even operational. You then throw in a cut to income, as we've seen and they are under real pressure. The worst think you'd want as a football club now, is a £300+ million wage bill, most of which is tied up to 3-5 year contracts.

As for the squad, I think they'd have liked to have freshed it up a bit and moved a couple out. If they don't sell any this summer, the value of their stars is depreciating rapidly as they approach 30. VVd is 30 next summer, so is Firmino & Henderson, Salah, Mane, are 29. You are getting to the point where people just pay nominal fees to pay the wages. I doubt it was ever the plan, but it's where they are at.
Click to expand...

Agree with almost everything there - my only challange would be the last paragragh. Salah, Mane and co. will probably command a large fee next summer & or at least I think that is what they are banking on
 
number4. said:
Agree with almost everything there - my only challange would be the last paragragh. Salah, Mane and co. will probably command a large fee next summer & or at least I think that is what they are banking on
Click to expand...

They may be banking on it, but I'm just not sure it's realistic when you see the trends in the transfer market. If FFP completely collapses, it may have an impact, but most sides know it's a dead asset that will just lose value. It's like James with us, another world class player but ultimately no real value in him, and the more it looks like it, the more it looks as if he was almost being given away.

I think the days of sides payijng £50m+ for lads who are 29+ and have a fair bit of mileage on the clock has gone. As I've said, if FFP goes maybe people review that, but in liue of that nobody is cuing up to pay big fees. Madrid wouldn't go higher than £70m for Mane when he was 26/7.
 

number4. said:
Agree with almost everything there - my only challange would be the last paragragh. Salah, Mane and co. will probably command a large fee next summer & or at least I think that is what they are banking on
Click to expand...

The older they get, the lower the fee and Mane and Firminho are getting to the stage where the fee drops dramatically. They need to sell one of their big hitters soon, the last real sacrifices where Suarez and Coutinho.
 

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